We have two blogs. The Six Disciplines blog is packed with business ideas. The second blog is Gary Harpst’s personal blog about his journey of attempting to integrate biblical principles with business. Feel free to enjoy either or both!

The Six Disciplines Blog

Author:

Created:

3/30/2012 10:14 AM

Since 2005, the Six Disciplines blog offers posts about performance excellence, strategy execution, business coaching, leadership development, innovation, and business process improvement. With more than 18,000 visitors monthly, this blog has received prestigious awards for leadership and management, and has been syndicated by several major media sources.

According to the consultants at Marakon, companies typically realize only about 60% of their strategies’ potential value because of defects and breakdowns in planning and execution. Yet, by following seven simple rules, you can get a lot more than that.

Marakon found that the processes companies use to develop plans and monitor performance make it difficult to discern whether the strategy-to-performance gap stems from poor planning, poor execution, both, or neither.

Here's what they found:

Companies rarely track performance against long-term plans.

Multi-year results rarely meet projections.

A lot of value is lost in translation.

Performance bottlenecks are frequently invisible to top management.

The strategy-to-performance gap fosters a culture of underperformance.

To help close the strategy-to-execution gap, Marakon recommends the following seven steps:

The cumulative effects of misalignment are a significant constraint on the ability of an organization to execute its strategy.

In fact, research has shown that up to 50% of the resources of a typical organization are not being effectively applied to the mission and vision of the company.

There are two types of organizational alignment: creeping and strategic.

Creeping misalignment occurs gradually every day, often in very small ways as the organization changes. In every day processes, as the organization changes, the "current" approach to doing things becomes less aligned with the goals of the company. As a result, it becomes an increasing drag on the success of the company until corrected.

Strategic misalignment occurs suddenly, when the leadership sets a strategic VFO (vital few objective) -- but the systems and resources of the organization are not deployed to support it. This type of misalignment surfaces suddenly as a barrier to implementing new strategies.

BOTTOMLINE: If your leadership does not learn how to align resources with goals, the free market will.

Although always important, communication is absolutely critical when deciding to adopt a strategy execution program like Six Disciplines.

It’s challenging to manage the transition ("if nothing changes, nothing changes...") if people have no sense of where the changes are headed. Painting a picture for them can be difficult.

The truth is that many organizations head into a transition state with nothing more than some basic ideas, some lofty goals and cherished values to guide them on their journey.

It’s crucial for leaders to develop and widely communicate a compelling “case for change.” The end product–a well-articulated and persuasive argument for change–becomes, in effect, the mantra of the upcoming change for the organization.

When communicating organizational change to your employees, include:

Reason for the change ("if nothing changes, nothing changes...")

Vision of the future (renewing your organization's mission, vision)

Plan for getting there (persistent, consistent and repeatable plan)

Belief that change is achievable (so that people can understand how they contribute)

Expectations (of where we're headed, how it's going to be while we journey there)

BOTTOMLINE: The reasons for change need to be communicated early, clearly, often and in delivered in many different ways.

The primary role of the execution system component is to help organizations get the right things done. To do this requires identifying execution problems as early as possible and addressing them.

Think of an organization as a system for deciding what to do (a strategy, a plan) and the managing the execution of that plan. When the system (the business) makes an error, choosing to do the wrong thing or forgetting to do something that is required, the problem must be corrected. The longer it takes to detect the problem, the more it costs to fix. If the business has no system in place to set, manage and monitor strategy execution, the process is not only error-prone, it’s a huge disaster just waiting to happen.

Without such an execution software system, an organization becomes unpredictable at best and eventually declines in its ability to execute, especially as it grows. That is why it’s important that an execution software system enables an organization to focus on learning as early as possible.

BOTTOMLINE:

An execution software system enables an organization to focus on learning to identify
execution problems as early as possible.

There are five primary types of organizational errors or causes for execution failure
within an organization: change, clarity, dependency, estimation and availability.

An execution software system needs to include the following elements: methodology
automation, time management, real-time activity alignment, weekly external review
cycle, total organizational engagement and execution management.

A complete strategy execution program depends upon the power of a shared community learning. First, the power of community is required to change the economics for implementing such a program within small and midsized organizations. Second,learning is required to overcome the natural tendency of individuals and organizations to wander from the very disciplines that can deliver them from the status quo.

It’s a tall order to build a community that agrees to share these attributes. Even though it’s difficult, it’s worth the effort, because well-formed communities accelerate learning.

BOTTOMLINE:

The Execution Revolution will be built around communities with the following characteristics:

A belief that their ultimate core competence is the ability to execute their strategy.

A shared repeatable methodology that organizes their efforts to execute better.

Strategy execution coaches who are experts in the repeatable methodology they share.

Shared technology (an execution software system) to help integrate planning and
activity alignment at all levels of the organization.

Active communities in the Execution Revolution consist of communities with these titles: coaches, leadership teams, initiative teams, team leader and team members and cross-company roles.

Among adult learners, the biggest barrier to fostering a learning community is pride. For senior leadership, the only way to remove this barrier is to display a passion for learning how to execute strategy effectively.

Of all the four components of a complete program – a repeatable methodology, strategy execution coaching, an execution software system and a shared learning community – the learning community has the most transforming power.

An organization that learns a systematic way of setting its priorities, that learns how to build detailed plans, that learns how to proactively manage those plans and communicate in an organized way is in a much better position.

In such an environment, goals are clearer and new employees can understand their role sooner. They learn how to communicate more effectively. Overall, the efficiency and effectiveness of the organization will be higher; it will have better capacity to respond to the demands of growth.

BOTTOMLINE:

Building an organization that can learn how to execute strategy and deal with the daily surprises of the business world is solving the one problem that makes solving all other problems easier.

Solving this one problem yields substantial long-term benefits for your business, including predictability, balance, managed growth and substantially increased market value. All of this promotes a better night’s sleep for you.

Solving this one problem also leads to the creation of an organization that is trusted both internally and externally. It enables an organization that learns how to develop its people to their fullest potential. It empowers an organization that can be successfully transitioned to the next generation, and so on.

The value of your business will be significantly higher if it has a predictable strategy
execution history.

Any business that would adopt a systematic program for strategy execution two years before selling the business would get 30–40 percent more for the business when sold. Why? Because having an organization that knows how to plan and execute is rare. Those who achieve it set themselves apart and are worth more.

With all the bad news bombarding us daily, it's time to get control over the things we can do, and do everything we can during times of uncertainty, to avoid the epic fail.

To wit, here's a short refresher on why companies fail:

Failure to understand the customer
• Why they buy, what they want (real need for the product/service)

Failure to understand the resources, time required to execute the strategy
• Can the staff, equipment, and processes handle the stated strategy?
• Failure to develop new employee and leadership skills

Failure to obtain senior leader commitment
• Failure to get management involved right from the start
• Failure to obtain sufficient company resources to accomplish task

Failure to obtain team member commitment• The strategy is not well explained to employees
• No incentives given to workers to embrace the strategy

Failure to manage change
• Inadequate understanding of the internal resistance to change
• Lack of vision on the relationships between processes, technology and organization

Failure to focus
• Inability or unwillingness to make choices which are true to the strategic mission (i.e. to do fewer things, better), leads to mediocrity, inability to compete

Failure to execute the plan
• No follow-through after initial planning
• No tracking of progress against the plan
• No accountability / consequences for the above

BOTTOMLINE: Start today...resolve to focus and act on the things you DO have control over (internal issues), on the highest priority activities you can - you'll find they all revolve around executing your strategy.

If you want to improve performance, or likewise increase capacity or capability, you need to track the one thing that you'll never get back: time.

In order to improve effectiveness and efficiency, you must understand how your time is being used. With all of the technological advances over the past two decades, we're continually forced to do things "better, faster, cheaper." In other words, all of these advances have taught us how to be more efficient.

But - have any of these advances (spreadsheets, email, cell phones, IM, etc.) made us more effective?

The difference between the two?

Being efficient is essentially doing things right.

Being effective is essentially doing the right things.

It's not enough to just do things right - we also need to balance it with doing the right things, doing the right things based on their priority.

As Dr. Stephen Covey once said: "The key is not to prioritize what's on your schedule, but to schedule your priorities.”

BOTTOMLINE: Take a good look at your calendar: Are you spending time on the most important things? Are you spending the appropriate amount of time on those activities that are the highest priority? How do you know?

If you're not tracking how you spend your time, how will you ever know?

The best way is to have an individual plan (we recommend quarterly) - of daily activities that you're responsible for, which support the organization's goals, initiatives and projects. Track your time against these projects daily, and review weekly. The goal is to spend the most time on the most important activities that get you closer to achieving the organization's goals..

Now, consider this: multiply this daily/weekly time-tracking activity times the number of people in your organization. You'll be amazed at how much more productivity and results you'll begin to see (or, very frustrated, by how much time is actually wasted on non-productive, non-essential activities...)

So.... if you're looking to improve your performance (or the performance of your organization) - how can you possibly improve, if you don't track your time!

In a survey of 163 CEOs by Forbes Insights in conjunction with the Association for Strategic Planning and the Council of Public Relations Firms, chief executives report that one-third of corporate strategies fail, and they fail for five reasons.

The five reasons why strategies fail are:

Unforeseen external circumstances (24 percent).

A lack of understanding among those involved in developing the strategy and what they need to do to make it successful (19 percent).

The strategy itself is flawed (18 percent).

There is a poor match between the strategy and the core competencies of the organization (16 percent).

There is a lack of accountability or of holding the team responsible (13 percent).

The whitepaper, "The Powerful Convergence of Strategy, Leadership and Communications" can be downloaded here.

During times of economic uncertainty, strategy refinement and execution need to become the top priority for business leaders.

How to start?

Begin by doing a SWOT Analysis. SWOT is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in your business.

The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving your strategy. SWOT analysis groups key pieces of information into two main categories:

Internal factors - The strengths and weaknesses internal to the organization. The internal factors may be viewed as strengths or weaknesses depending upon their impact on the organizations objectives. The factors may include all of the 4Ps (product, price, place, promotion) as well as personnel, finance, manufacturing capabilities, and so on.

External factors - The opportunities and threats presented by the external environment. The external factors may include the economy, technological change, legislation, and socio-cultural changes, as well as changes in your marketplace or competitive position.

BOTTOMLINE: While it's important to regularly conduct a SWOT analysis on your business, it's critical to revisit SWOT during times of economic uncertainty. In particular, it's essential that you focus on the internal factors that you can control; not the external factors you can't control. By focusing on internal factors, you'll be better able to unearth new opportunities for innovation.

Occasionally, circumstance and progress in seemingly unrelated areas combine to create an opportunity for solving old problems in new and exciting ways.

One of those breakthrough periods is upon us now, with regard to strategy execution.

This inflection point has developed primarily because large corporations have made huge investments developing best practices for effective management, strong leadership and strategy execution.

Built upon the results of these efforts, we believe the coming Execution Revolution will result in an order-of-magnitude change in cost that will allow small to midsized businesses not only to catch up, but to actually leapfrog, larger organizations in their execution management capabilities.

This is what the Execution Revolution is all about.

Leaders of small and mid-sized businesses now have an opportunity to go from almost no system to a new category in the excellence industry – a complete strategy execution program that puts everything needed for a balanced strategy execution together in one affordable combination.

In researching how to build a sustainable strategy execution program, we’ve uncovered three major barriers that have to be overcome if the program is to be successful. They are insufficient expertise, prohibitive economics and simple human nature. We’ve determined that these three barriers are actually the major design requirements any truly effective strategy execution program must be able to address.

The Expertise Hurdle: To produce lasting results, any complete strategy execution program has to somehow help the organizations that use it to cope with the wide range of expertise required to employ the appropriate best practices that are available. It must also help these organizations recognize that this body of knowledge will keep growing and changing.

The Economics Hurdle: Clearly, any strategy execution program developed for small and midsized businesses must consider how to deliver the expertise and technology required at an economic level that these organizations can afford. The only way this can be achieved is by integrating these essential components of the program – in a complete solution – and deliver them using an innovative model.

The Human Nature Hurdle: Now, for the toughest hurdle of all: people. One of the most persistent challenges we face as humans is to narrow the gap between knowing what needs to be done, and actually doing what needs to be done. Another dimension of human nature that needs to be considered is resistance to change. Most of us resist change, unless it’s our own idea.

BOTTOMLINE:

In order to build a sustainable strategy execution program in small and midsized businesses, three major barriers or hurdles need to be overcome: insufficient expertise, prohibitive economics and simple human nature.

While larger companies have knowledgeable people with the necessary expertise in business improvement disciplines, small and midsized organizations don’t have equal
access to such a wide array of expertise.

Developing mastery in even just one business improvement discipline requires a substantial investment. None of this comes cheap, and there are no shortcuts.

Any strategy execution program developed for small and midsized businesses must consider how to deliver the expertise and technology required in a way that makes sense economically for these enterprises. The only way this kind of change in economics can be achieved is by integrating the essential components of such a program into a complete solution and delivering them using an innovative distribution
model.

One of the most persistent challenges we face as humans is to narrow the gap between knowing what needs to be done and actually doing what needs to be done.

Other human nature hurdles to overcome include our resistance to change, our unique differences, our need to communicate effectively and our need for purpose in our lives, including meaningful work.

The critical question for every business leader is, “How do I build an organization that consistently executes its strategy?”

The answer: it takes a complete program. The reasons other approaches do not last is that they are missing key elements. Technology (i.e., performance mangement software) alone is not enough. Training, by itself, is not adequate. Simply reading best-selling books won’t do it. New leadership by itself is not the answer. Retaining better people won’t make the critical difference. Hiring an executive coach by itself will not overcome this challenge.

No, the answer lies in taking a more profoundly holistic approach.

BOTTOMLINE: Our field research has shown us that singular, piece-meal approaches just don’t last. Sustainability, the capacity of an organization to maintain the necessary balance between strategy and execution, and doing so while overcoming the hurdles, requires a complete program consisting of four tightly-integrated elements:

A Repeatable Methodology to drive organizational learning and understanding.

Strategy Execution Coaching to nurture and nudge to stay the course.

An Execution Software System to engage everyone, everyday in real-time alignment.

Community Learning to share and reinforce best practices and accelerate learning\

A methodology, or method, is another name for any step-by-step approach to getting something done. A business-building methodology must include the steps that are essential for an organization to build and sustain a healthy, growing business. It must define how the organization sets its goals and priorities and organizes its resources to best achieve these goals.

It must teach the organization how to stay focused on what’s important, while dealing with the inevitable surprises that occur regularly in life. It must provide ways to identify where the organization is on plan (or off) and do so in real-time.

A business-building methodology must provide a framework for an organization to learn and grow as its size and complexity grows – a way to increase its capability to learn and grow faster than its challenges. Another priority of the methodology is to connect long-term goals with daily decisions. To do this requires connecting people’s activities to the company’s strategy – from the top to the bottom of the organization. It requires a clear process for defining strategy and goals that are then translated into team and individual goals.

Another benefit of having a repeatable and documented business-building methodology is the accumulation of knowledge by individuals and teams. Defining a process and then documenting changes to that process reinforces the learning that occurs so that you don’t forget it. When many individuals use a common methodology, the rate of accumulated learning that is shared is accelerated.

BOTTOMLINE:

The goal of a complete strategy execution program is to enable organizations to spend an increasing amount of time in Quadrant II. Here, their performance is more predictable and sustainable and execution of strategy becomes balanced.

Achieving this goal requires thinking holistically about the business – how to make all the components, people, processes, policies, key measures, assets and strategies work together to meet the promises made to customers and other stakeholders and to repeat these in a predictable fashion.

Be aware that reading about each discipline separately doesn’t make your business perform better instantly any more than taking five golf lessons makes you a good golfer. In the end, you have to learn how to use all of the disciplines together and the only way to truly learn is by doing.

We are absolutely advocating this: every organization that is serious about excellence
and execution must practice some defined methodology as the foundation of its efforts.

The absolute foundation of building an organization that is increasing its ability to execute is a repeatable methodology.

In addition, the disciplines must be used in conjunction with the other three required elements of a complete strategy execution program: strategy execution coaching, an execution software system and the benefits of community learning.

Most leaders fail to understand the implication of the human nature barriers. Our natural tendency is to do what we like doing, not necessarily what we should. The topic of coaching offers the most insight into what it takes to deliver a complete strategy execution program.

Strategy execution coaching implies that an accountability model exists. Employees in organizations will learn to be accountable – that is, they’ll do what is needed and expected – proportionate to the extent in which three factors are present:

Expectations are clear.

These expectations are perceived as credible and reasonable because the employees
were involved in setting them.

Employees understand the impact of success, or lack thereof, on the organization.

When these three factors aren’t in place, employees can’t achieve their potential, no matter what kind of people they are. A critical element for creating company-wide accountability is to put appropriate focus on results, not activities. For most employees, it’s more motivating to be told what needs to be done and why, but not how.

BOTTOMLINE: Being accountable to ourselves is not enough. We clearly need others, preferably outside of our organization, to hold us accountable and to help us accelerate our learning. We need others to help us fight the continual battles against our own human nature and our tendency to do what we want to do, rather than what we need to do. We need others to challenge our way of thinking and acting. We need others to help us increase our capability to manage the next challenge. We need others to learn how to do this faster than we can do it on our own. Finally, we need others to help make change last within our organizations, to make the new way of working “stick.” That’s what strategy execution coaching is all about.

When it comes to executing your business strategy, you must first translate the strategic plan into short-term operating objectives or metrics - and progress must be monitored and measured regularly.

To achieve strategic objectives, your organization must develop short-term measurable objectives that logically relate to the company's strategy, as well as a plan for how your organization plans to compete: how you will be different from your competition.

Unfortunately, this is where most strategic planning sessions end; in a 3-inch binder sitting on a dusty shelf.

What needs to occur next is translating your organization's strategy into actionable plans and initiatives, and perhaps most importantly, translate these plans into measurable gradecards or scorecards which are continually monitored.

BOTTOMLINE: Continual monitoring progress toward organizational goals (both short-term and long-term) helps to keep you focused on what's important, which is an integral and vital part of the execution process. The earlier that course corrections can be made, the better.

For better or worse, why do so many companies veer off their strategic plan?

Look for a disconnect between strategy and how resources are allocated, say Harvard Business School's Joseph L. Bower and Clark G. Gilbert, in their article "What Really Drives Strategy?"

Their assertion?

"Organizations of any size are built around a series of building blocks, and the bigger the company the more responsibility in those building blocks. Today they are called SBUs—Strategic Business Units—or they are country organizations. If you add up what those people actually do, which ideas they choose to bring forward, and which of those get funded, the consequences of that activity is what adds up to the strategy of the company, not words on paper. And once you see that, you begin to ask questions such as: What determines which ideas get sponsored and funded? If I'm the top management, how can I shape that process, manage it, and give it direction?"

That's what their book, From Resource Allocation to Strategy, is about.

BOTTOMLINE: Interestingly enough, the "disconnect" between strategy and how resources are allocated, as identified in this HBR article, is preciselywhyit's critical to align your resources and systems. Since up to 90% of effectively formulated strategies fail due to execution, it's critcal to understand that it's after the goals are set that companies run into one of their greatest challenges - their own internal systems - processes, policies, technologies, measures and people.

What would be your dream job? If money were not a consideration, what would you do?
A recent Harris Interactive survey among almost 8,000 employees over the age of 18 found the following:

45% of workers said they were satisfied or very satisfied with their jobs

55% of workers said they were not satisfied

Furthermore...

20% were passionate about their jobs

33% believed they had reached a dead end

21% were eager to change to something different

The above statistics paint a vivid picture of how elusive passion can be in careers.

Here are some more observations about dream jobs:

Dream jobs are absolutely personal. Everyone has a different dream.

Dream jobs are aligned with a person's core passion. Your passion is what you care most about in life. It is what attracts you and gives you energy. It is what inspires you, and what you can not live without doing.

Dream jobs consistently leverage your core strengths and skills, draw on what you do best and most naturally, let you do what you are really good at doing.

Dream jobs minimize the down sides, the things you don't like to do or don't do well. They accentuate the positive allowing you to focus your work time on activities you love to do.

Dream jobs offer enough compensation to sufficiently support a life style that is acceptable and feels good. If a minimum level of income is not there, even an otherwise ideal fit may not be the dream job.

Finally, dream jobs are not perfect jobs. Even when the fit is right, every job has some drawbacks

Top-performing organizations rate not just a little better in these five areas -- but at least 100% better. This whitepaper looks at the results of the research, and identifies five factors that the top 25% of all high-performing organizations have in common.

"The Keys to Strategy Execution: A Global Study of Current Trends and Future Possibilities", was a research study commissioned by the American Management Association and conducted by the Human Resource Institute.

The research identified the leading obstacles that hinder strategy execution and what companies can do to overcome them.

The following is a quick review of some of the main findings:

Higher performers tend to be better at executing strategies

Clarity is crucial to the execution of strategy

Overall, organizations are not achieving clarity to the degree they should

Higher-performing companies are much more likely than lower performers to provide clarity

Alignment practices are widely used and highly valued

Higher-performing organizations are considerably more likely to use certain alignment strategies

Speed and adaptability are differentiators

Decision-making speed remains a major problem

Employee engagement is a concern

Leadership development seems to be a deficit in the area of execution

Customer needs/demands and worker capabilities are the most important drivers of execution today

A lack of resources and the presence of government regulations are the primary barriers to strategy execution today

Strategy formulation, while extremely challenging and difficult, is usually not what concerns most small business leaders. In fact, it's not even planning that worried worries them. It's something even bigger and more problematic.

It's the execution of strategy that keeps many small business leaders awake at night!

Why is execution so hard?

Because making the plan work is even bigger challenge than creating the plan: Making strategy work is more difficult than the task of strategy making.

Execution is critical to success. Execution represents a disciplined process that enables an organization to take a strategy and make it work. Without a careful, planned approach to execution, strategic goals cannot be attained.

Developing such a logical approach, however, represents a tremendous challenge - particularly to leaders of growing organizations.

Here are the key take-aways:

Making strategy work (execution) is critical - and much more difficult than strategy formulation

Even the best plans still fail or don't meet expectations -- because of poor execution.

Despite its importance, execution is often handled poorly by many organizations.

The continual problem?

Much more is known about planning than doing, about strategy-making than making strategy work. And business leaders still don't seem to understand a great deal about the execution of strategy.

The obvious questions?

If execution is paramount to success, why don't more organizations develop a disciplined approach to it?

Why don't companies spend more time developing and perfecting processes that help them achieve their strategic goals?

Why can't more companies execute strategies - consistently?

The simple answer?

Because - execution is extremely difficult. We're all taught to strategize, and to plan - but little time is spent teaching (and learning) how to execute!

BOTTOMLINE: From the CEO on down, everyone within an organization must commit to and own the processes and actions related to effective execution. Everyone must learn to be accountable for their activities and projects, and these effort must relate to the goals, and ultimately the strategy of the company.